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Is there anything more confounding than someone who doesn’t think we are over taxed? While it may initially seem impossible for an individual to be so oblivious, the world does not have tax ‘price tags’ posted on everything to remind you.
Demonstrating the breakdown of who pays the burden of income taxes, for example, is clearly important – yet, sometimes it’s better to focus on the smaller, widespread, tax burdens we all face. After all, nobody is able to avoid the burden of government.
To that aim, we put together this collection of the “Top 10 Most Mind-Boggling Taxes,” perhaps your city or state has made the list!
10. Fountain Soda (Chicago)
In Chicago there is big difference if you are drinking out of a can or a fountain; if it’s the former, the additional tax is 3 percent while the latter is taxed at 9 percent. Around for over a decade, this tax aims to curb obesity by making the usually larger fountain sodas more expensive to purchase.
9. Blueberries (Maine)
Maine produces 99 percent of the blueberries picked wildly in the nation. They also slap a one-and-a-half cent tax per pound on anyone growing, handling, processing, selling or purchasing blueberries. For what it’s worth, this tax is one of the oldest on our list: blueberry harvesters have been paying this tax since 1945.
8. Tan Tax (United States)
This infamous piece of “Obamacare” is a 10 percent federal tax on tanning bed services. Arguably attempting to discourage the using of these bed services, the tax does not apply to spray on services. For those who were hoping the “temporary” tax would be removed, the tax was made permanent in 2010.
7. Tattoos (Arkansas)
While this tax seems like it should be a relic of a different era, Arkansas implemented this 6 percent tax on permanent body art in 2005. If this incentivizes you to opt for that piercing you have been eyeing instead, you’re out of luck there too; body piercings and electrolysis are included .
6. A New Kind of Death Tax (Seattle)
Starting in 2011, it began to cost more for handling a death in Seattle. In addition to any estate tax you may face, it costs $50.00 to report a death to the Medical Examiner’s Office. If you don’t pay up, you won’t receive the necessary paper work for burial or cremation.
5. “Bagel” Tax (New York)
Was that bagel you’re eating sliced when you received it? If so, New York considers it a prepared food and adds an eight-cent tax to the bill. On the books for quite a while, New York took the step to start enforcing the tax in 2010, enraging New Yorkers and bagel store owners in particular. While eight pennies may not seem like a huge increase, one store owner is reporting he owes thousands of dollars in back taxes as a result!
4. Tethered Hot Air Balloon Rides (Kansas)
Going hot air balloon riding in Kansas? Well, if you’re scared to be blown away to OZ and opt to have your balloon tethered to the ground, then you are subject to local amusement park ride taxes. However, if you take a ride on the wild side and your hot air balloon ride is determined to be “untethered, piloted, and travels for some distance downwind of the launching point”, then you are considered to be partaking in air commerce and consequently your ride not subject to the tax.
3. Playing Card Tax (Alabama)
Beginning in 2004, Alabama imposes a 10-cent tax on each deck of cards that contains up to 54 cards. In addition, if you wish to sell a deck of cards, make sure you purchase your playing card privilege license before you do so.
2. “Luxury” Coffee Lids (Colorado)
In March 2010 Colorado eliminated a tax protection for “non-essential” packaging for food and drinks bought at restaurants and convenience stores. The move led to several interesting classifications including coffee cups being deemed essential while coffee lids were determined to not be. As a consequence, coffee shops are subject to (and, therefore, coffee drinkers must pay) a 2.9 percent luxury item tax on sleeves and lids.
1. The Non-Governmental “Jock Tax” (Tennessee)
This $2,500 per-game tax (max 3 games) tops the list despite not being quite as obviously strange as the other taxes. That’s because despite many states having so-called “jock taxes,” this is the only tax on the list where the money does not even go to the government – rather it heads to stadium owners who likely already benefitted from taxpayer-backed deals and own the team. If you thought government getting one more cent of your money was frustrating, this odd tax situation manages to add insult to injury.
This list should settle it once and for all, if you make it or do it, they will tax it.
In early June the Supreme Court issued a unanimous decision allowing a Constitutional challenge to a New Deal agriculture law go forward. The Washington Post tells the story of embattled raisin farmer, Marvin Horne, who is fighting for the right to keep what he grows:
Horne, a raisin farmer, has been breaking the law for 11 solid years. He now owes the U.S. government at least $650,000 in unpaid fines. And 1.2 million pounds of unpaid raisins, roughly equal to his entire harvest for four years.
His crime? Horne defied one of the strangest arms of the federal bureaucracy — a farm program created to solve a problem during the Truman administration, and never turned off.
He said no to the national raisin reserve.
The whole article is well worth your read.
What could compel growers to hand over the goods they have produced for little or no compensation?
The Raisin Marketing Order.
One of 27 Marketing Orders enshrined in the Agricultural Marketing Agreement of 1937, this Depression-era law created a government-sponsored cartel that authorizes the “Raisin Administrative Committee” to seize a portion of the annual raisin crop in order to collectively influence supply, demand, and ultimately price. The Post goes on to offer a sanitized explanation:
It works like this: In a given year, the government may decide that farmers are growing more raisins than Americans will want to eat. That would cause supply to outstrip demand. Raisin prices would drop. And raisin farmers might go out of business.
To prevent that, the government does something drastic. It takes away a percentage of every farmer’s raisins. Often, without paying for them.
These seized raisins are put into a government-controlled “reserve” and kept off U.S. markets. In theory, that lowers the available supply of raisins and thereby increases the price for farmers’ raisin crops. Or, at least, the part of their crops that the government didn’t just take.
Where do those raisins go? The Raisin Administrative Committee stores them until such a time as it deems it permissible to let more raisins go on the market. Some are distributed for free to the School Lunch and other government programs, others are auctioned off. Profits are used to pay for storage and “raisin promotion.” Farmers, who have been forced to turn over up to 47 percent of their crop in the past, get nothing or next to nothing in return. Nothing, that is, except the “privilege” to pursue their chosen vocation.
Adding insult to injury, because the Raisin Administrative Committee is enforced by the Department of Agriculture, ultimately taxpayers are paying for a program that increases prices for consumers and robs farmers.
Raisins are only one of many products that must adhere to the government’s price-fixing schemes. Marketing Orders are also in place for almonds, apricots, avocados, cherries, citrus fruits, cranberries, dates, grapes, hazelnuts, kiwifruit, nectarines, olives, onions, peaches, pears, pistachios, plums, potatoes, spearmint oil, tomatoes, and walnuts. And, lest we soon forget, dairy has its very own onerous marketing order that restricts supply and hikes prices for consumers.
While Mr. Horne’s case still has a long way to go as it once again wends its way through the lower courts, in the eyes of most taxpayers the outdated Marketing Orders should be a clear violation of the Takings Clause (the Fifth Amendment of the Bill of Rights). Rather than wait for the courts to unravel the red tape, Representative Trey Radel (R-FL) has introduced H.R. 2840, the Raisin Farmer Freedom Act, a bill that would exempt raisins from Agricultural Marketing Orders.
This is a good first step for raisin farmers eager to get out from under the oppressive Raisin Marketing Order. However, the bill falls short of what the agriculture industry needs to thrive in the 21st century. Instead of exempting only one crop, Congress should be working hard to dismantle the entire regime of Marketing Orders, a relic of outdated agriculture policies more akin to the U.S.S. R.’s top-down central planning.
The “invisible hand” described by Adam Smith is no less present in agriculture than it is in any other sector of the economy. Simply put, the government doesn’t have and never will have the information necessary to efficiently manage a market from on high. The fact that a “national raisin reserve” exists is proof positive of that fact.
Exempting raisin farmers from Marketing Orders would help Mr. Horne and his friends today. But Congress should go farther and level the playing field by completely eliminating these types of “admission fees” to the marketplace. Doing so would be a boon to both producers and consumers alike.5 Comments | Post a Comment | Sign up for NTU Action Alerts
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Author of NTUF's new study, "Tobacco Taxes: Problems, Not Solutions, for Taxpayers and Budgets", Diana Oprinescu joins the podcast to talk about her startling findings. An update on the winners of the Milton Friedman Day tax reform contest; and the Outrage of the Week!
Today’s Taxpayer News!
In a July 25th meeting of the Progressive Democrats of America Roundtable in Washington, D.C., Congressman Keith Ellison (D-MN) was discussing fiscal and budgetary shortfalls when he said:
"The bottom line is we're not broke, there's plenty of money, it's just the government doesn't have it."
Though Ellison doesn't appear to be concerned by the ever-increasing debt, many at the Congressional Budget Office (CBO) are, as they have repeatedly warned that unless current policies change, budgetary shortfalls will continue to climb over the next decade. "Such high and rising debt," they contend, "would have serious negative consequences," including:
Rep. Ellison has proposed a solution to ensure that the government does recapture some of that money it "doesn't have" at the moment. He introduced H.R. 1579, the Inclusive Prosperity Act of 2013, in order to institute a new tax on certain securities transactions. Ellison contends that this could raise upwards of $300 billion per year.
The Congressman's proposal is a form of transaction tax, which is one of the reform options that NTUF polled our members and associates on during our Milton Friedman Legacy Day event. It was not as popular with the taxpayers we spoke to as the FairTax and Flat Tax, two other options that tap into consumption instead of income.1 Comments | Post a Comment | Sign up for NTU Action Alerts
Keystone Pipeline Keeps Hitting White House Roadblocks
The public and many in Congress continue to support construction of the Keystone XL Pipeline despite President Obama’s unrealistically low job creation projections. The administration has impeded construction of the pipeline for five years while it has called for multiple environmental impact assessments. Each time a result falls in favor of TransCanada, the company requesting the construction permit, the administration asks for another report or for an additional application, effectively preventing construction.
First, the administration requested a study by the State Department, under the direction of Hillary Clinton, on the environmental impacts of the Pipeline. When the report detailed that no substantial impact would occur, the President rejected the permit and asked TransCanada to reapply. When they did so, Obama announced that he would delay the decision until after the 2012 election. Now, a year and a half later, although TransCanada has completed two legs of the pipeline, it has no more certainty as to whether it will be allowed to build the section which extends over the northern border of the United States.
On July 24th, in an interview with The New York Times, The President belittled the potential economic benefits of the Pipeline, contending that it will only create 2,000 jobs during construction and 50 to 100 permanent jobs. The Washington Post’s “Fact Checker” responded to the President’s statement by recalling the job estimates released by TransCanada and the State Department, his executive agency. They called into question his calculations and stated that the figure was more accurately anywhere from 5,000 to 6,000 jobs. Other projections put the job count at 20,000. While these numbers vary, there is consensus that it would create a substantial number of jobs in a still-struggling economy.
On a more fundamental level, the Administration is unnecessarily preventing a private company from materializing a project which would provide the United States access to 500,000 barrels of oil per day from a stable ally. Privately created jobs, however many, will benefit the economy. Regardless, a company should not have to prove that it would create a minimum number of jobs to qualify for the presidential approval.
At the same time, environmental concerns should be assuaged by the extremely rigorous safety guidelines and consideration of risk at every step in the process. In Canada a combination of monitoring and new technologies have helped to both reduce environmental impact and spur development.. Heading south via the Pipeline, The New York Times reports that a recent study by the National Academy of Sciences found that the tar sands derived oil, also called diluted bitumen, is “no riskier to transport than other types of crude oil.” And TransCanada has even agreed to comply with 57 additional construction conditions demanded by the U.S. government:
TransCanada maintains its commitment to build Keystone XL as safely and reliably as possible. To that end, the company will adopt and comply with 57 special conditions developed by the U.S. federal pipeline regulator PHMSA (Pipeline and Hazardous Materials Safety Administration) that provide an even greater confidence in the operation and monitoring of the pipeline, including: a higher number of remotely controlled shut-off valves, increased pipeline inspections and pipe that is buried deeper in the ground. The Final Environmental Impact Statement for the project issued in August 2011 concluded the incorporation of the 57 special conditions 'would result in a project that would have a degree of safety over any other typically constructed domestic oil pipeline system under current code.'
The House recently passed the Northern Route Approval Act to bypass the presidential approval process for the Pipeline. The Senate is proceeding with plans of its own to allow construction. It is time for a nation with access to great energy resources to allow the implementation of policy to progress. With no legitimate legal issues and no identified significant environmental impacts, people must ask,“Why does the President keep adding hoops for this project to jump through?”
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Today’s Taxpayer News!
President Obama appeared on the “Tonight Show” with Jay Leno on Tuesday, marking his tenth appearance on a talk show since becoming president. Unfortunately, as the Washington Times and NTU’s Pete Sepp pointed out, all that entertainment can be expensive for taxpayers.
Officials in Unity, Pennsylvania, are voting tonight on a plan to offer seniors a full rebate on their property taxes. NTU’s Pete Sepp applauded the measure as a step in the right direction, although an across-the-board reduction is generally better for taxpayers.0 Comments | Post a Comment | Sign up for NTU Action Alerts
For this year’s Milton Friedman Legacy Day activity, NTU Foundation asked taxpayers across the country what federal tax system they want. At our in-person event in downtown Washington, DC and online at our special voting page, we had over 650 total votes on if the current system should be kept or replaced with a FairTax, Flat Tax, National Transaction Tax, or a Value-Added Tax.
If you are unfamiliar with these tax systems, we had some fancy posters made to show the basic points and contentions associated with each (you can click on each to see the full resolution):
Here are the results broken down by those who attended our physical event and those voting via our survey online:
Put another way, here's an infographic put together by our fantastic Creative Content Manager, Tim Howland:
What do these results mean? Probably a few things:
We need more information and more taxpayers in the network of voting and voicing their preferences. Stay tuned, we here at NTU Foundation are working on another survey to get a more clear idea on what people want out of their tax system.16 Comments | Post a Comment | Sign up for NTU Action Alerts
In a time of increased federal government intervention, school choice has been a silver lining for small government supporters. The idea that parents should be empowered to choose the school their children attend and that market mechanisms can be utilized to fix the declining American school system has gained popularity with both politicians and the public. Surprisingly, many forget who the intellectual father of the school choice movement is none other than the esteemed economist Milton Friedman.
Friedman's discussion of school choice started over 50 years ago in an essay "The Role of Government in Education." The piece outlined two main arguments for school vouchers that are still the basis of the voucher system today. First, he argued that schools based on choice would lead to competing among local institutions. The better a school's results, the more students the school would have elect to attend, and the more money they would receive through either government payments or vouchers. Secondly, Friedman argued that voucher programs are a more moral system because it did not limit children's choice of educational institutions to one designated by their home address.
From 1955 on, Milton Friedman became one of the lead champions of school choice. However, the idea faced heavy resistance from teacher unions and politicians on both sides of the isle. Nonetheless, in typical Friedman style, he pushed on with his efforts. Over time, he succeeded in sidestepping special interests and politicians by finding avenues to speak directly with citizens about the issue. For example, Milton dedicated a full episode to the topic during his very popular PBS Free to Choose Series that aired in 1980.
The concept of school choice continues to fight for acceptance. Initially a preferred method of liberal activists to help impoverished urban minorities escape poverty, the idea was later adopted by the Republican Party when Ronald Reagan made it the focus of his education plank in the 1980 Presidential Election. After Reagan's electoral success, it took another decade before Friedman saw his ideas become reality in the city of Milwaukee, Wisconsin when a voucher program was adopted for some students in its school district in 1990.
While Milton would prefer to see every child already enjoying the option of choice, the movement has made significant progress since it was first conceived. There is no doubt that the father of school choice would be proud to see Wisconsin, Ohio, Florida, Georgia, and even the District of Columbia adopt some variation of a voucher system. He would surely smile his iconic smile at the innovation school choice supporters have utilized to create charter schools and tuition tax credits in various states across the country.
With Friedman Legacy Week over, many of us reflect upon the economic genius of the man who shaped so much of the world as we see it but let us not forget his devotion to promoting school choice.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Today’s Taxpayer News!
Earlier this week, a dispute between CBS and Time Warner Cable resulted in a channel blackout for millions of cable subscribers in Chicago, New York, and Los Angeles. As NTU’s Brandon Arnold points out, the confusing web of telecommunications laws regulations makes it far more likely that such a dispute will end in a stalemate.
The Wall St. Journal offers this in-depth look at what tax reform could mean for the average American taxpayer - and whether it’s likely such reform could become law.0 Comments | Post a Comment | Sign up for NTU Action Alerts